Free Webinar: Understanding Taxes & Social Security for Spain-based Workers
Confused by Spain’s tax system?
You’re not alone. Whether you’re employed or self-employed, navigating taxes and social security can be overwhelming. That’s why we’re offering a free webinar in association with our chosen partners, to answer your most pressing questions and help you stay on top of the rules, deadlines, and obligations that affect your financial life in Spain.
Join us as Louis Williams CFA, CEO of Entre Trámites, shares his expertise and covers key topics like:
Employees vs. Self-Employed: Who benefits more from a tax perspective?
Tax vs. Social Security: What’s the difference?
Tax Returns: Why is this necessary, and what does it involve?
Important Dates: Key moments in the tax calendar you can’t afford to miss.
Retentions: How does that work, and how does it impact your taxes?
When to form a business entity: Should you go the corporate route, and what are the advantages?
Other Taxes to Consider: from IVA to local taxes.
Spain’s tax system can be complex and expensive if you get it wrong.
Don’t risk costly mistakes—get clarity and expert advice from someone who knows the landscape inside out.
Reserve Your Spot Today!
📅 Date: Wednesday 22nd October
⏰ Time: 1:00pm CEST
🔗 Format: Live Webinar (with Q&A)
Complete the form below to register right now for this free event:
NOTE: We will allow some time for questions at the end of the webinar, but it won’t be the time or place to dig into private individual tax advice, and everything shared in the webinar is for general information only. If you need one-to-one advice support with your taxes, book a free discovery call with Entre Trámites, and they’ll take care of you.
Spanish Tax & Social Security Webinar FAQs
Important Update
This information reflects Spanish tax regulations as of October 2024. Consult with a qualified tax professional for specific advice.
What's the difference between Autónomo (Self-Employed) and Employee?
| Self-Employed (Autónomo) | Employee |
|---|---|
|
• Operates independently • Invoices clients directly • Manages own taxes/social security • Flexible work arrangements • Choose contribution level |
• Hired by company • Fixed salary and benefits • Company handles admin • Set work conditions • Fixed contribution rates |
Which option is more financially beneficial?
For incomes above €17,500, self-employment typically results in higher net income. Below this threshold, employment may be more advantageous. Self-employed individuals pay lower social security fees (starting at €87/month in the first year) compared to the combined employer-employee social security costs of around 32% for employed workers.
What benefits do I get as self-employed vs employed?
Employed workers get full unemployment benefits, work-related injury coverage, maternity/paternity leave, and pension based on earnings. Self-employed get similar healthcare coverage but more limited unemployment benefits and must opt-in for certain protections. Pension benefits depend on contribution levels chosen.
How much are social security payments?
Self-employed: First year starts at €87/month, then increases to €230-620/month based on earnings.
Employed: Combined employer-employee rate is about 32% of salary (employer pays ~25.5%, employee pays ~6.5%).
Employed: Combined employer-employee rate is about 32% of salary (employer pays ~25.5%, employee pays ~6.5%).
What are the main tax obligations for self-employed?
- Quarterly income tax prepayments (Modelo 130)
- VAT returns if applicable (not for overseas business clients)
- Annual income tax declaration
- Social security payments every two months
- Must declare all worldwide income including investments
What expenses can I deduct as self-employed?
- Business-related expenses must be directly related to your work
- Up to 30% of home utilities if working from home
- Business travel and client meetings
- Work equipment (laptops, etc.)
- Must keep proper invoices with NIE/tax details
Digital Nomad Visa Requirements
Eligibility:
- Must register as self-employed/employed
- Income > 200% minimum wage
- Max 20% income from Spanish sources
- Health insurance required
- Must register for social security
Beckham Law Benefits
Key advantages:
Example savings on €60,000 income:
- 24% flat tax rate on Spanish income
- 6-year maximum duration
- Must apply within 6 months of starting work
- Only for employees (not self-employed)
- Cannot have been tax resident in Spain in previous 5 years
Example savings on €60,000 income:
- Normal tax: ~€18,000
- Beckham Law: €14,400
- Savings: €3,600/year
Spanish Pension System Overview
State Pension Requirements:
- Minimum 15 years contributions
- Based on last 25 years' salary
- Maximum contribution ceiling ~€60,0
- System facing financial challenges
- Maximum €5,750 annual contribution
- Tax-deductible in Spain
- Foreign pension contributions usually not deductible
- Need ~€400,000-500,000 for €20,000 annual retirement income
International Pension Considerations
Key Points:
- US government pensions may be tax-exempt
- EU pensions generally taxable in Spain
- Must declare foreign pension income
- Can combine EU contribution years
- Consider private investment alternatives
- Regular investment accounts may be more flexible
What are the 2024 income tax brackets (IRPF)?
| Income Range | Tax Rate |
|---|---|
| €0 - €12,450 | 19% |
| €12,450 - €20,200 | 24% |
| €20,200 - €35,200 | 30% |
| €35,200 - €60,000 | 37% |
| €60,000+ | 45% |
| Above €300,000 | 47% |
What are the VAT (IVA) rates?
| Rate | Applies To |
|---|---|
| 21% (Standard) | Most goods and services |
| 10% (Reduced) | Bars/restaurants, hotels, art |
| 4% (Super-reduced) | Pharmaceuticals, newspapers |
| 0% | Exports |
| Exempt | Transport, healthcare, education |
What are the quarterly VAT filing deadlines?
- First quarter: April 1st to April 20th
- Second quarter: July 1st to July 20th
- Third quarter: October 1st to October 20th
- Fourth quarter: January 1st to January 30th (following year)
What tax forms (Modelos) do I need to file?
Quarterly:
- VAT returns (Modelo 303)
- Income tax prepayments (Modelo 130)
- Income tax return (April-June)
- Annual VAT summary
- Informative returns (Modelo 180 or 190)
- Corporate tax if applicable (Modelo 200)
What are the current social security rates?
Employees:
- Employer contribution: 32% of salary
- Employee contribution: 6.5% of salary
- Example: For €100 cost to employer, employee receives €70.83 before income tax
- First year: €87/month
- Regular rate: €230-620/month based on income
- Can choose higher contributions for better benefits
What benefits are covered?
| Benefit Type | Employed | Self-Employed |
|---|---|---|
| Healthcare | Yes | Yes |
| Unemployment | Full coverage | Limited |
| Work injury | Full coverage | Basic coverage |
| Maternity/Paternity | Full benefits | Lower benefits |
| Pension | Based on salary | Based on contributions |
What are the characteristics of an S.L.?
- Can have one or more shareholders
- Limited liability protection
- Recommended for income over €60,000
- Subject to Corporate Tax
- Setup takes around 30 days
- Monthly accounting cost: €117 + VAT
- Easier access to bank loans
- Better professional image
What expenses can an S.L. deduct?
- Materials and merchandise
- Employee wages and social security
- Rent
- Professional services
- Financial expenses
All expenses must have proper invoices with complete company information including tax ID numbers.
What are the most common mistakes to avoid?
- Always file returns on time (even if incorrect)
- Don't be too aggressive with expense claims
- Keep proper invoices and receipts
- Don't mix personal and business expenses
- Register as self-employed when required by visa conditions
When should I consider a limited company (S.L.) instead?
Consider an S.L. if:
- Income exceeds €60,000
- Planning to hire employees
- Need liability protection
- Raising capital from investors
Below €60,000, self-employed is typically more cost-effective due to lower administrative costs.